SLM Solutions (AM3D.DE) reported a €30 million ($35 million) loss for the year ending December 31, 2020, with revenues at €62 million ($73 million) versus €49 million ($58 million) in 2019. A global provider of additive manufacturing (AM) technology, SLM started 2021 with high expectations as the company returns to its pre-pandemic growth path, showing a 26% year-over-year revenue improvement and a market-leading gross margin of 53%.
Furthermore, with the launch of the NXG XII 600 system – a 12-laser machine designed for high-volume, serial production – the company completed its ambitious project to develop a system they hope will push the entire industry towards powder bed fusion (PBF) AM. On the business side, CEO Meddah Hadjar left the company in January 2021 due to private reasons and has since been replaced by Sam O’Leary. O’Leary was previously in the role of Chief Operating Officer and is deeply experienced in AM, having overseen the development of the NXG XII 600 laser beam platform.
Trading under the ticker symbol AM3D on Germany’s Frankfurt Stock Exchange, SLM shares roller-coastered since the beginning of 2021, dropping to values as low as €15.26 ($18) and peaking to some of the highest stock prices in a year, over the €24 ($28) mark. After the 2020 earnings announcement on March 25, 2021, shares plummeted to €16 ($19), only to bounce back the day after, following an earnings call in after market hours.
According to financial analysis platform Simply Wall St., shareholders have seen SLM stock price up an impressive 137% in the last twelve months, a very optimistic outlook that certainly beats the loss of about 3% per year over the last half-decade. Generally weighing more on the long-term performance over the short term, Simply Wall St. sees the recent improvement as a hint of a “(positive) inflection point within the business,” but leaves room for speculation on whether the increase will be sustained.
Based out of Lübeck, Germany, SLM said it recorded a 32% decrease in machine orders down to €46 million ($54 million) compared with the previous year at €68 million ($80 million). Out of the overall annual sales, 73% stem from the company’s core “machine business” segment, which comprises devices from the Selective Laser Melting (SLM) division together with options such as powder sieving stations and other peripheral equipment. Here, sales rose 28%.
“Laser Powder Bed Fusion continues to be the most dynamic driver of growth and innovation in the metal Additive Manufacturing market and SLM is proud to be leading the way,” described O’ Leary. “Despite the difficult COVID19 related business environment, we made tremendous progress in innovation and with key customers, adopting our technology on a larger scale. We launched our industry-defining new machine platform, the NXG XII 600, in November 2020. The initial customer feedback we received has been overwhelming. We are convinced that the commercialization of the NXG XII 600 will be a significant growth driver for our business in the coming years.”
Despite the economic and operational challenges that arose from the COVID-19 pandemic, particularly in two of the company’s key end markets – civil aviation and automotive – the industrial adoption of metal-based AM and, in particular, SLM’s laser PBF technology has begun, said SLM. In fact, pandemic-related pressures on the global supply chains and traditional manufacturing practices have highlighted the many benefits presented by additive technologies, which the business sees as an inevitable accelerator of adoption. Additionally, with the introduction of new, more productive machine generations, metal AM has become more cost-competitive, said SLM.
For 2021, SLM targets revenue growth of at least 15%, supported by a strong machine backlog of €30 million ($35 million) and an EBITDA recovery expected to continue throughout the rest of the year. 2020 already saw a 43% improvement over the previous year, driven by strong growth in the second half due to increasing vaccination levels in key markets. For subsequent years, management estimates an acceleration of revenue growth due to the positive effects of the introduction of SLM’s NXG XII 600.
Chief Financial Officer Dirk Ackermann even forecasted that the economic environment would slowly normalize, and the COVID-19 burdens will ease during the second half of 2021. Earlier in March, SLM plans to use proceeds of €15 million ($18 million) from the second tranche of its convertible bond 2020/2026 to scale-up manufacturing of the NXG XII 600 and expand the required services network. Even more so, the 3D printing manufacturer is assessing plans to establish a presence on the West Coast of the United States to be closer to key customers and evaluating a potential secondary listing of shares in the country via a Level 3 American Depositary Receipt (ADR) offering, which represents an initial public offering (IPO) on U.S. exchanges.
Despite market restrictions due to the pandemic, SLM Solutions managed to increase sales and continue work on developing the NXG XII 600, which was officially presented in November. Expecting a significant recovery in the global economy for 2021 and 2022, based on the increased availability of vaccines and further fiscal stimulus measures around the world, management is anticipating that global economies will recover, particularly in the most important target markets for SLM, which includes the U.S. and countries of the Eurozone, leading to more robust demand for metal-based AM machines.
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